This paper examines whether the Mortensen-Pissarides matching model can account for the housing markets facts, most of all the empirical anomaly known as ‘price dispersion’. Our main finding is that the model can account for the three basic facts of housing market, without any restrictive...

The recent and growing literature which has extended the use of search and matching models even to the housing market does not use the free entry or zero-profit assumption as a key condition for solving the equilibrium of the model. This is because a straightforward adaptation of the basic...

Chapter 1. The Fundamentals of a Search and Matching Model -- Chapter 2. A Basic Search and Matching Model of the Housing Market -- Chapter 3. The Effect of Trading Frictions on the House Price -- Chapter 4. Search and Matching in the “Four-Quadrant” Model -- Chapter 5. Matching in the...